I can guarantee the reason why it's not printing halftones from Illustrator is because you do not have a PPD in place. You do a have a postscript printer, but that doesn't mean the postscript driver is installed and since you just reinstalled everything I can only assume that is what happening. I'm assuming you have windows 7 64 bit? download and install the driver here then do a test print. I recommend connecting the printer by USB over ethernet if you have that option. http://www.epson.com/cgi-bin/Store/support/supDetail.jsp?oid=94507&infoType=Downloads&plat form=OSF_W_7-64

Definitely do not make halftones in photoshop. They are not true halftones and will look funky once you print. You want your rip or Illustrator/indesign to do this.

I can offer you two options to fix this so you won't have to apply frequency and angle each time in Illustrator. You can re set up wasatch to print halftones like before. This will require some reading and testing http://www.scribd.com/doc/38569787/WASATCH-QUICKSTART-SP. I haven't messed with wastach in about 5 years though as it's far too expensive for simple film screen print separations, but I recall you have to mess with ink droplet size/print head alignment and all of that stuff not just setting the frequency and angle.

Option two you buy accurip that is built specifically for what you do and your epson 4880 and costs around $500, never has to be paid to be upgraded and has full technical support. You basically install your print driver and install accurip. It automatically finds your printer and installs an accurip to epson 4880 driver. You can then go into settings to select any frequency/angle/droplet size, weight, etc that will override any other program like Illustrator. Once set it you can forget about it. I'm not a salesperson for accurip. I just work with a lot of screen printers and I can swear by that software. It is the best for what it does. I'd also recommend switching to refillable cartridges and use onyx black. The standard epson black is for cmyk prints and isn't as dark as you'd like for burning screens. It's also far cheaper.

If none of these options work for you and you cant figure it out take a screen shot of the printer preview window and I'll look it over to see if any of the settings are messed up. I'll need to see the general tab and the output tab.